The strategy() function is used to initialize the strategy with the name "ChannelBreakOutStrategy" and overlay=true to display it on the price chart.
The length variable is defined using the input.int() function. Traders can input the length of the channel they want to capture breakouts from. It accepts integer values between 1 and 1000, with a default value of 5.
The upBound variable is calculated using the highest() function from the ta (Technical Analysis) module. It finds the highest high price within the specified length period.
The downBound variable is calculated using the lowest() function from the ta module. It finds the lowest low price within the specified length period.
The if statement checks if the current bar's close price is not null (not na(close)). This ensures that the breakout calculation is only performed when there is enough historical data.
Inside the if statement, the strategy.entry() function is used to execute trades based on the breakouts. There are two entry conditions:
Long entry: strategy.entry("ChBrkLE", strategy.long, stop=upBound + syminfo.mintick, comment="ChBrkLE"). It enters a long position when the price crosses above the upBound of the channel.
Short entry: strategy.entry("ChBrkSE", strategy.short, stop=downBound - syminfo.mintick, comment="ChBrkSE"). It enters a short position when the price crosses below the downBound of the channel.
The length variable is defined using the input.int() function. Traders can input the length of the channel they want to capture breakouts from. It accepts integer values between 1 and 1000, with a default value of 5.
The upBound variable is calculated using the highest() function from the ta (Technical Analysis) module. It finds the highest high price within the specified length period.
The downBound variable is calculated using the lowest() function from the ta module. It finds the lowest low price within the specified length period.
The if statement checks if the current bar's close price is not null (not na(close)). This ensures that the breakout calculation is only performed when there is enough historical data.
Inside the if statement, the strategy.entry() function is used to execute trades based on the breakouts. There are two entry conditions:
Long entry: strategy.entry("ChBrkLE", strategy.long, stop=upBound + syminfo.mintick, comment="ChBrkLE"). It enters a long position when the price crosses above the upBound of the channel.
Short entry: strategy.entry("ChBrkSE", strategy.short, stop=downBound - syminfo.mintick, comment="ChBrkSE"). It enters a short position when the price crosses below the downBound of the channel.